U.S. seeks stiff tariffs on Chinese solar panels

Oct. 11, 2012
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Workers mak their way along a solar panel field in China. The U.S. Commerce Department on Wednesday issued a final ruling calling for stiff tariffs on solar panels imported from China. / AFP/Getty Images

by Wendy Koch, USA TODAY

by Wendy Koch, USA TODAY

The Commerce Department issued a final ruling Wednesday that calls for hefty tariffs on most solar panels imported from China, arguing they've been illegally subsidized and dumped on the U.S. market.

It seeks tariffs of 24% to 36% on solar panels imported from five dozen Chinese manufacturers and up to 250% for other Chinese suppliers. For China's largest manufacturer, Suntech, the rate is nearly 36%, up from 34% proposed earlier this year.

The ruling's impact is unclear because of a potential loophole. It applies only to solar panels made with Chinese-produced solar cells and thus may allow manufacturers to avoid duties by using cells made elsewhere. It comes amid a presidential election in which both candidates are talking tough on China. Yet the year-long trade dispute has split the U.S. solar industry.

Some manufacturers argue China's subsidies have made it difficult for them to compete, causing about a dozen American bankruptcies, such as Solyndra's, in the last 18 months. Other U.S. solar companies, primarily those that design, market and install solar panels, say tariffs could raise prices, inflame trade tensions and stunt the industry's rapid growth.

The case began last October when a coalition of manufacturers led by SolarWorld, a German company with factories in the United States, filed a petition with the Commerce Department and International Trade Commission. They alleged Chinese manufacturers were illegally dumping solar cells and panels in the U.S. market and receiving billions in illegal subsidies from their own government.

"Chinese leaders are well aware that their own companies break trade rules. They admit that fact in private conversations, but they do not do anything about it," said Melanie Hart, who analyzes China's energy policies for the Center for American Progress, a Washington-based think tank. "President Obama's increasingly tough trade stance against China has been a long time coming."

Some solar companies worry about the fallout. "We remain concerned about the growing global trade war, which will only hurt American solar industry jobs, growth and consumers," said Jigar Shah, president of the Coalition for Affordable Solar Energy, which opposed the tariffs. Still, he said the tariffs won't stop solar development.

Tim Brightbill, a lawyer with the Washington-based Wiley Rein firm who represents the coalition that filed the petition, said the loophole remains a "serious concern." He urged the Commerce Department to drop it from the preliminary ruling, arguing both Chinese solar cells and panels are illegally subsidized, but it did not do so.

"While today's decision rightly shows that the U.S. will protect its rights in the global trading system, we're also learning that trade litigation alone is not enough to solve the complex challenges that exist between the U.S. and China," said Rhone Resch, president of the Solar Energy Industries Association, a trade group that did not take a formal position on the dispute. "What is immediately clear is that the future must begin with diplomacy."

The Commerce Department's ruling is final, but the tariffs won't go into effect unless the International Trade Commission determines that the underpriced panels are, indeed, injuring the U.S. solar industry. That decision is not expected until November. In a preliminary ruling, the ITC said such injury had occurred.